Prime Minister Naoto Kan took a defensive stance Monday, offering to reflect the opinions of the opposition camp in drawing up the fiscal 2011 budget.

Kan, president of the ruling Democratic Party of Japan, made the overture for cooperation on the legislative agenda during his first Diet debate since taking over the reins of government in early June from Yukio Hatoyama.

He is facing a divided Diet after the DPJ-led ruling coalition’s loss of its Upper House majority in the July 11 election.

Kan urged the opposition parties to join in deliberations and in passing key bills, and said the government may in turn consider reflecting their views when drafting the budget.

“While it goes without saying that the ruling camp must work hard to ensure careful deliberations, I’d like to ask the opposition’s support in making the Diet a place where policies important for the welfare of the people can be realized,” Kan said.

Deciding the contents of the budget is considered the primary job of ruling party lawmakers. Opposition participation in the process would mark a significant departure from the long-held norm.

Kan’s quiescence in the face of the opposition underlines the political difficulty he faces with his coalition only in control of the Lower House.

Since the July 11 election, Kan has found himself in an increasingly tight spot as he seeks to retain the DPJ helm when the party holds is presidential election next month amid internal calls for him to step down over the poor election results.

During the first day of Lower House Budget Committee sessions, which run until Thursday, Kan pledged to beat deflation by reviving the economy, public finances and social welfare systems, while apologizing for his “abrupt” remarks on a possible consumption tax hike, which he admitted angered voters.

“We will try to boost economic growth by creating more jobs and overcoming deflation,” Kan said, adding that when crafting the budget for fiscal 2011, he would like to “consider including the opposition’s suggestions.”

“I caused a lot trouble with the public and my peers with my remarks on the consumption tax,” he said, adding he sent the wrong message.

Taking the podium, Sadakazu Tanigaki, president of the Liberal Democratic Party, said the problem isn’t limited to Kan’s remarks on the tax, but includes the government’s handling of other key issues, namely the relocation of the U.S. Futenma base in Okinawa and the money scandals involving Hatoyama and DPJ kingpin Ichiro Ozawa.

Tanigaki said the public wasn’t satisfied with the administration’s handling of these issues, and suggested Kan should dissolve the Diet and call a snap election.

Kan, however, vowed to remain at his post, but added a general election will be necessary when the tax hike becomes inevitable. “When large-scale tax reforms are carried out, I believe it will be necessary for the public to make that decision,” he said.

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